Why client conflict is still a big issue for marketers

Alvin NeoAfter the mega merger between Publicis and Omnicom, the issue of client conflict has reared its head. But in the days of agency giants, does it matter anymore?

In this interview with Mumbrella Asia editor Robin Hicks, Alvin Neo, who spent stints with P&G and Johnson & Johnson and is now the CMO of healthcare provider Parkway Pantai, explains why keeping clients separate is still critical for agencies.

What was your initial reaction when you heard about the Omnicom Publicis merger?

It was a shock. But these days, you can’t turn a corner without bumping into an agency that isn’t owned by WPP or one of the big groups. Even the smaller agencies you meet and think, hey, here’s someone new and different, turn out to be owned by one of the big guns.

But this isn’t surprising. Consolidation is inevitable. What’s left are small boutiques, which will survive. It’s the mid-sized agencies in the middle who will be feeling the pressure.

Omnicom and Publicis were huge before they merged. If you’re overweight or you’re super overweight, you still can’t fit through the door. I don’t think the merger will make a huge difference to the market.

So, you don’t think that clients will leave the merged agency – if the deal goes through – because of conflict?

No. Where would they go? WPP? To another giant? If you want to hire a top three agency, you usually have to choose between the big groups. And they’re all becoming the same, in my view. Would you rather shop at Wallmart or Target?

What’s more important is how comfortable you are with your existing agency relationship and your account team. That matters far more than the name on the door.

No matter which agency you use, if you have a brilliant account team that leaves the agency, the outcome will always be bad for you as a client. I had once had a fantastic account team at Millward Brown [a WPP-owned research agency]. But when they moved on, delays and mistakes crept in, and the quality of strategic thinking suffered.

How sensitive are you as a client about your agency working for a competing brand?

If I was Pepsi and my agency was handling Coke and sitting in the same office and on the same floor, I’d be very concerned. Direct competitors are a big no-no. Non-competing brands that are owned by the same holding company are less of a problem.

Agencies will always tell you that they have Chinese Walls in place, with different teams sitting in difference rooms. But the real separation of teams is very hard to achieve in practical terms. There will always be people in the same building who are friends who get together and talk. It’s inevitable that talk will turn to business at some point.

For a client, is there greater sensitivity to conflict with creative agencies than there is with media agencies?

Yes and no. It depends on the kind of work your media agency does for you. If it’s a straightforward media buy, it’s not an issue. The likes of P&G and Unilever are still stuck in a traditional way of thinking and how they use their agencies – for buying power. But if you’re relying on a media agency to be a genuine innovation partner – to think about ways to leverage new and existing media – then it is a problem.

I don’t want my competitors to have access to the high-level work my agency is doing for me. It could be that we launch an interesting campaign, only for a me-too campaign to run soon after from the same agency group.

The balance of power in marketing has shifted away from traditional media, so conflict in media agencies that offer more than traditional thinking has become a much bigger issue.

Which agencies do you use now?

MEC for media. And we push them really hard. Not all members of an agency are created equally, and it’s hard to fight for the best people when you’re not the biggest client on the roster. But we needed a media agency with the scale and number-crunching capabilities that the smaller guys do not have.

When I want really innovative and strategic stuff, I need to make sure that senior people are sitting in those meetings. I give my agencies the freedom to do interesting work, that way the best people will fight to work on my account – so that they can win awards, which I understand are important to an agency.

I use a roster of smaller boutique creative agencies, one for each of our three hospital brands. Because our spend is smaller than that of a telco or an FMCG, the big agencies wouldn’t give us their best teams. I use Kiiin and have just started using Goodfellas [a local agency started by Patrick Low, the former creative director at Y&R]. Other smaller shops handle our direct and studio work.

Are there any instances in your career where conflict has been a problem?

Not to the level where I was concerned. The marketing we were doing was quite different to what our competitors were doing, and it wasn’t easy to steal or replicate. Yes, they could have aped it, but if they did I don’t think they would have been able to deliver against it.

What’s the best way for agencies to manage conflict?

Separate premises are fundamental. There should be no sharing of photocopiers, toilets or break rooms. I wouldn’t even want people from different agencies to be going to the same Starbucks in the morning, if they work on competing business. Clients need separate eco-systems. Without that, it’s naïve to assume that important information won’t leak out.

But in this world of mega agencies, there will never be pure separation. At some level, particularly at senior management, conflict will arise in some form.

Alvin Neo will be among the judges at the Institute of Advertising, Singapore’s APPIES event, which will be held in Singapore on 15-16 August.


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